NewEnergyNews: TODAY’S STUDY: CALIFORNIA’S GREEN ECONOMY/

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YESTERDAY

THINGS-TO-THINK-ABOUT WEDNESDAY, August 23:

  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And The New Energy Boom
  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And the EV Revolution
  • THE DAY BEFORE

  • Weekend Video: Coming Ocean Current Collapse Could Up Climate Crisis
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    WEEKEND VIDEOS, July 15-16:

  • Weekend Video: The Truth About China And The Climate Crisis
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  • Weekend Video: The 9-1-1 On Rooftop Solar
  • THE DAY BEFORE THAT

    WEEKEND VIDEOS, July 8-9:

  • Weekend Video: Bill Nye Science Guy On The Climate Crisis
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    WEEKEND VIDEOS, July 1-2:

  • The Global New Energy Boom Accelerates
  • Ukraine Faces The Climate Crisis While Fighting To Survive
  • Texas Heat And Politics Of Denial
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    Founding Editor Herman K. Trabish

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    WEEKEND VIDEOS, June 17-18

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    email: herman@NewEnergyNews.net

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  • The Virtual Power Plant Boom, Part 1
  • The Virtual Power Plant Boom, Part 2

    Monday, February 13, 2012

    TODAY’S STUDY: CALIFORNIA’S GREEN ECONOMY

    Many Shades of Green
    February 2012 (Next 10)

    Executive Summary

    The California Core Green Economy reflected greater resilience than the California economy as a whole during the recent recession. Reflecting the brunt of the economic downturn, the total economy slumped by seven percent while the Core Green Economy contracted by three percent from January 2009 to 2010. Over the long term, January 1995 to 2010, the total economy grew by 12 percent while jobs in the Core Green Economy increased by 53 percent. In other words, while the downturn reset Core Green employment back to 2008 levels, total state employment was set back to 2001 levels.

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    While statewide Core Green employment fell by three percent in the last observable year, the San Diego Region, the Bay Area and the Sacramento Area have shown the greatest resilience, each with losses of less than two percent from January 2009 to 2010.

    Between 1995 and 2010, Core Green employment expanded in the Sacramento Area by 113 percent and in the Bay Area by 76 percent, followed by the San Diego Region (+65%) and Orange County (+62%).

    As the products and services of the Core Green Economy spread across the rest of the economy, new occupations emerge and existing occupations are increasingly taking on “green” tasks.

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    Employment and business growth varies across the 15 green industry segments and despite the dampening effects of the economic downturn, job gains were witnessed in Energy Infrastructure, Advanced Materials, Clean Transportation, and Energy Generation.

    Employment in Energy Infrastructure grew by 14 percent from January 2009 to 2010. Over the single year, statewide employment in Advanced Materials expanded by four percent while Clean Transportation and Energy Generation grew by one percent each.

    With over 1,200 jobs in 2010, Clean Manufacturing & Industrial Support jobs expanded 2.6 times over 1995. Energy Generation employment has more than doubled in 16 years totaling nearly 47,000 jobs in 2010. Clean Transportation expanded 119 percent over the long term, totaling 6,800 jobs in 2010. Advanced Materials reported the fastest employment growth rate from 1995 to 2010, expanding by 322 percent from a small base to 900 jobs in 2010.

    Value chain activities in California’s Core Green Economy are diverse, and the impact of the economic downturn has varied across the different sectors.

    Twenty-seven percent of jobs in the Core Green Economy are in Manufacturing, while the share is only ten percent in the total economy. Manufacturing was also the only element of the value chain with recent growth, expanding by one percent from January 2009 to 2010.

    Business Associations as well as Finance & Investment and Installation are leading in long-term job growth, all more than doubling in employment size since 1995.

    While Research & Development has doubled since 1995, jobs dropped ten percent over the recent period.

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    The California economy was hit hard in the recent economic downturn but the extent of job losses varies by industry. One of the characteristics of the current downturn has been the difficultly all businesses have had in accessing the capital needed to grow and make new investments in equipment upgrades and new products.

    Businesses, households and others see the opportunity for improving resource efficiencies (and reducing resource expenditures), yet acting on these choices is constrained by financial markets and market uncertainty related to the public policy environment and the financial crisis. These uncertainties hold back growth in the businesses that provide the products and services that improve efficiencies in the consumption of all natural resources. The application of these products from the Core Green Economy helps improve the productivity of resources consumed, reduces waste and alleviates costs associated with pollution. As a result, consumers save money and businesses improve their competitive edge and that of the economy as a whole.

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    California’s Green Economy – Exploring California’s Transforming Economy

    The global economy entered into a substantial downturn in the latter part of 2007. Some parts of the world, such as China, India, and Brazil, have continued to grow over this period though at slower rates than before. The recovery across the United States has been uneven and further constrained by tight financial markets. When banks do not lend to small and medium sized businesses, these businesses cannot make needed capital investments, launch building projects, or expand production. Without access to capital, the economy cannot grow and pull itself out of the economic downturn. The recession officially lasted from December 2007 to June 2009, yet the U.S. economy and California economy continue to drag.

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    In this context, the world is still facing sizable challenges that were present before the downturn. These include rising prices and increasing volatility for energy and natural resources. This has been driven primarily by growing global demand from emerging economies for limited resources. A case in point is the fact that oil prices have not dropped following the slowdown of the U.S. economy, but continued to rise as surplus supplies have easily found new markets outside our borders. As populations continue to grow more prosperous, the demand for all resources will continue to rise.

    Regardless of our economic health, the impacts of climate change are increasingly felt and loom larger in the distance. Climate change not only threatens our costal populations through rising sea levels, it also changes weather patterns, disrupting global agricultural production and diminishing the world’s major sources of fresh water from rainfall and glaciers. Preparing for these changes is not without cost, but waiting to react to the real impacts of climate change would be much more costly...

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    The economic crisis is making the climate crisis that much more challenging to address given the lack of capital for businesses, households and the public sector to make the needed investments in clean energy installations, energy efficiency, and other means for reducing negative environmental impacts (including greenhouse gas emissions) and raising the productivity of energy and all natural resources.

    As businesses, residents, and public entities reel from rising resource prices, growing price volatility, and diminishing financial resources, they seek out new ways of cutting costs as a buffer against this growing uncertainty. When consumers seek out new types of products and new ways of doing things, creative entrepreneurs see new markets to serve. This shift to greater resource productivity translates into greater economic competitiveness as we improve our ability to do more with less.

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    While California’s overall economy is lagging the nation’s recovery, the state shows signs of recovery, economic growth and greater resource productivity. California’s forward thinking public policy record has served to support the growth of markets related to clean energy and related products. In addition, the state is home to some of the world’s most innovative entrepreneurs and research centers. Further, the state benefits from its population of early adopters of new technology. These combined forces drive the innovation process and place the state at the forefront of the growing global green economy.

    As consumer habits change, they stimulate new markets and new business activity. As new technologies emerge, they can create greater positive impacts for the environment as well as the economy. By raising efficiency standards, streamlining permitting, offering incentives, and providing creative forms of financing, smartly crafted public policy can reinforce and even speed these vital dynamics.

    The growing green economy is about both the emergence of new industries and the transformation of existing industries. There are multiple facets to the changes underway, and they are interrelated.

    The economy consists of economic actors that are operating business-as-usual and those that are adapting to their new circumstances. Those committed to business-as-usual will eventually be priced out of existence as prices for energy and all natural resources continue to rise.

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    Other economic actors are seeking out new products and new ways of doing things in order to improve the resource efficiency of their own operations, and they make up the “Adaptive Green Economy.” The Adaptive Green Economy includes businesses, households, and public sector organizations that are changing their processes to improve sustainability, reduce costs or anticipate regulatory changes. These entities are reexamining their processes and investing in fundamental changes in their operations, as well as encouraging their suppliers to do likewise. Examples include the efforts of large corporations including Staples, Walmart and FedEx to significantly improve their own energy and resource efficiency and to set standards for their suppliers to follow suit. An added component of these efforts, besides the public relations value for the company, is the public awareness that is raised about actionable cost-effective measures. The actions of these companies and others demonstrate that transitioning away from business-as-usual and to the Adaptive Green Economy is good for the bottom line.2 This is not only evident in the growing activities of business associations but also in the growing course offerings related to sustainability at business schools.

    Also included in the Adaptive Green Economy are new businesses founded on principles of sustainability. From the outset, these companies develop their products with consideration for the entire product lifecycle. Examples include Tom’s of Maine toothpaste and Method cleaning products. The success and resiliency of companies in the Adaptive Green Economy will signal to other companies across the economy to consider their own transformation to sustainable business practices. The jobs in the adaptive economy are an important aspect to the overall transformation, because as with information technology (IT), jobs using IT are far greater in number than the jobs creating IT.

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    The Core Green Economy provides the products and services that enable the transformation toward a cleaner, more efficient and more competitive economy. The Core Green Economy consists of businesses that provide the products and services that:

    Provide alternatives to carbon-based energy sources

    Conserve energy and all natural resources

    Reduce pollution and repurpose waste

    The Core Green Economy represents a diverse mix of industries including novel technologies as well as tried and tested products. These include energy generation and efficiency as well as transportation and water efficiency. The 15 green segments of the Core Green Economy are described on page 20.

    As these changes progress, demand for clean technology grows. This will yield positive environmental outcomes as well as new opportunities for business and employment growth. Public policy can spur this development by creating markets for clean technology.

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    Conclusion

    In sum, the recent economic recession and slow recovery have dealt California a major blow, and different sectors of the economy have suffered to varying degrees. While California’s economy as a whole suffered a seven percent drop in employment from January 2009 to January 2010, the state’s Core Green Economy dropped by three percent.

    It is important to keep in mind that businesses across the economy have suffered from the drying up of the financial markets. Without the ability to access capital, businesses cannot make needed equipment upgrades, expand production or make other necessary investments that would support broader economic growth. Uncertainty surrounding the national political environment undermines the ability for businesses to plan ahead, especially in areas related to the Core Green Economy.

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    The problem is that prices will continue to rise for energy and all natural resources,5 global competition will continue to grow for all products and services, and the real impacts of climate change are increasingly observed and causing significant economic hardship with every cataclysmic weather episode. The price tags for stronger hurricanes, more extreme droughts and heavier flooding are not only felt at the point of rebuilding but also in rising insurance rates for coastal populations and agricultural producers.

    The need to adapt to our changing global economic context as well as the global environmental context is now. In so doing, this economic activity will translate into growing businesses and employment in industries providing the vital products and services that enable a transition away from carbon-based fuels, improve resource efficiencies and reduce negative environmental impacts.

    California’s Core Green Economy shows signs of greater resilience than the economy as a whole. Over the past 16 years, its growth has outpaced the economy as a whole by more than a factor of four, and percentage losses are half those of the state’s total employment. Despite these losses, some segments posted employment gains in the most recent observable period (January 2009 to 2010).

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    Employment in Energy Infrastructure increased 14 percent, Advanced Materials expanded by four percent while Clean Transportation and Energy Generation grew by one percent each. Across the value chain, Manufacturing jobs in the Core Green Economy expanded by one percent from January 2009 to 2010, the only value chain segment to do so.

    And some regions of the state have fared better than others. The San Diego Region, the Bay Area and the Sacramento Area have shown the greatest resilience, each with losses of less than two percent from January 2009 to 2010.

    California’s Core Green Economy is diverse and well distributed across the state. The state’s Core Green Economy has weathered the recent economic storm better than the economy as a whole. Continued public policy efforts which support the development of new markets related to these industries, as well as increasing access to capital for businesses otherwise capable of growing, will ensure that growth in the Core Green Economy can continue and that California’s competitive edge in these industries will also continue.

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